Saturday, May 30, 2015

Karl Popper in The Open Society and its Enemies (vol. 2) makes a very interesting point about Marx’s labour theory of value:

“The strange thing about the value theory is that it considers human labour as fundamentally different from all other processes in nature, for example, from the labour of animals. This shows clearly that the theory is based ultimately upon a moral theory, the doctrine that human suffering and a human lifetime spent is a thing fundamentally different from all natural processes. We can call this the doctrine of the holiness of human labour. Now I do not deny that this theory is right in the moral sense; that is to say, that we should act according to it. But I also think that an economic analysis should not be based upon a moral or metaphysical or religious doctrine of which the holder is unconscious. Marx who, as we shall see in chapter 22, did not consciously believe in a humanitarian morality, or who repressed such beliefs, was building upon a moralistic basis where he did not suspect it—in his abstract theory of value. This is, of course, connected with his essentialism: the essence of all social and economic relations is human labour.” (Popper 1949: 329, n. 24).

And we can go on and say: from an economic perspective the labour theory of value – if it really is meant to be an empirical concept – is empirically unsupported and untenable.

If we consider a given array of factor inputs used in a production process, what can transform those factor inputs into an output commodity that can fetch a price on a market? The following factors:

(1) some type of labour to transform the factor inputs into an output commodity, and

(2) a demand for the output commodity and a person or people willing to buy it.

But is free human wage labour the only thing that can fulfil (1)? It is clearly not.

We have a number of sources of labour power as follows:

Types of Labour Power

(1) slaves;

(2) free human wage labour;

(3) animal labour;

(4) machines powered by forces of nature (e.g., wind driving a wind-mill or water driving a water wheel) or machines and robots powered by natural forces produced by human technology (e.g., steam or electricity).

You can produce commodities that fetch money profits by methods (1), (3) and (4) and clearly Marx’s nebulous labour value and surplus labour value are not necessary conditions for either production of commodities or monetary profits.

In fact, animals are a much underrated source of labour power: right into the early 20th century animal labour power was a fundamental source of labour even in advanced capitalist economies (think here of horse power used in transportation and farming). Even today all over the developing capitalist world animal labour is very important, just as it was in the 19th century.

What is more, as production becomes more and more automated by machines, robots and artificial intelligence, we could easily imagine a world in which capitalism continues and money profits continue, but human labour falls towards zero. So where, if surplus labour value is the source of money profit, would profit come from in such a world? Of course, this is just a pseudo-problem because the labour theory of value is false and does not explain profits in the first place.

In short, the Marxist labour theory of value makes a fetish of free human labour power, and, as Popper argued, probably as a moral idea, not as a meaningful and justifiable economic concept.

“This paper uses evidence from a firm survey conducted in a number of EU countries to investigate a range of different theories as to why firms appear reluctant to lower wages. The sample covers 14,975 firms from 14 European countries, representing around 47.3 million employees. .... Across all countries and sectors, the two most important causes for avoiding base wage cuts are the belief that this would result in a reduction in morale or effort and the danger that the most productive workers would leave as a consequence.” (Du Caju et al. 2013: 2).

“We conducted a field experiment to test whether workers reciprocate wage cuts and raises with low or high work productivity. Wage cuts had a detrimental and persistent impact on productivity, reducing average output by more than 20%.” (Kube et al. 2013: 853).

“A survey of 184 firms was conducted to investigate the reasons for wage rigidity. The strongest support was found for explanations based on adverse selection in quits and on the effect of wages on effort. In addition, survey respondents indicated that reducing turnover is an important explanation of wage rigidity for white-collar workers, and that implicit contracts are an important explanation for other workers.” (Campbell 1997: 759).

“We document the results of a repeat survey, which updates Agell and Lundborg (1995), on wage rigidity in a sample of 159 Swedish manufacturing firms, conducted during the severe Swedish recession of the 1990s. It is found that not even a prolonged period of very high unemployment and quite low inflation softened workers’ resistance to wage cuts.” (Agell and Lundborg 2003: 15).

Monday, May 25, 2015

And some people think that downwards nominal wage rigidity is a product of modern economies from the 20th century:

“It very rarely happens that the nominal price of labour universally falls; but we well know that it frequently remains the same, while the nominal price of provisions has been gradually increasing. This is, in effect, a real fall in the price of labour; and during this period, the condition of the lower orders of the community must gradually grow worse and worse.” (Malthus 1798: 34–35).

This appears in the Reverend Thomas Malthus’ (1766–1834) famous An Essay on the Principle of Population (which is available here) already in the first edition of 1798, but also in subsequent editions (e.g., Malthus 1803: 14–15).

Presumably money wages were not as inflexible downwards as they are today, but in Malthus’ time were apparently still relatively inflexible enough to merit comment as though this was reasonably well known.

Now the evidence would strongly suggest that in the mid-Victorian period money wages were rather more flexible than they are now, so, with the development of capitalism and the growth of a large class of urban workers (or what Marxists call the reserve army of labour, the body of unemployed and under-employed in capitalist society), had nominal wages become more flexible than in Malthus’ day?

At any rate, by the 1880s and 1890s we can see strong evidence that money wages, even if they had become more flexible by the 1860s, had attained a strong degree of inflexibility downwards, as discussed in these posts:

Saturday, May 23, 2015

The basic facts are these. Marx published volume 1 of Capital in German in 1867, but only volume 1 of Capital was published in Marx’s lifetime. The rest were edited and published by Engels. No English translation of volume 1 appeared in Marx’s lifetime.

Furthermore, there were a vast group of manuscripts that Marx worked on in the course of his life reflecting his work on Capital, and along with Marx’s published economic writings and those published by Engels we can list all these works as follows:

(2) Marx, A Contribution to the Critique of Political Economy (1859).
This was Marx’s initial, long-awaited work on political economy, but was a great disappointment to most of his followers (Wheen 2001: 237–238). Much of it was incorporated into the first volume of Capital.

(3) Manuscript of 1861–1863
A large manuscript of 1,500 pages (Wheen 2001: 258) which included Marx’s analysis of the history of economy thought which later appeared as Theories of Surplus Value.

(4) First Draft of Capital:
Manuscript of 1863–1865
A first draft of Capital. Marx took the first 40% and revised it in a fresh draft and published the first German edition of Capital from it in 1867 (Sperber 2014: 421).

(5) volume 1 of Capital in German published in a first edition of 1867 (by Meissner, Hamburg). This is available here:

Let us review the circumstances preceding the publication of the first volume of Capital.

In 1863 Marx abandoned his Manuscript of 1861–1863 (from which was later taken the Theories of Surplus Value) and started the new Manuscript of 1863–1865 which was a first draft of volumes 1, 2 and 3 of Capital. However, Marx then abandoned the first draft of volume 1 and started again in 1865, so that the published volume 1 was written after drafts of volumes 2 and 3, as Marx himself says in a letter to Sigmund Schott of 3 November, 1877:

Dear Sir,

My best thanks for the packages. Your offer to arrange for other material to be sent to me from France, Italy, Switzerland, etc. is exceedingly welcome, although I feel reluctant to make undue claims on you. I don't at all mind waiting, by the by, nor will this in any way hold up my work, for I am applying myself to various parts of the book in turn. In fact, privatim, I began by writing Capital in a sequence (starting with the 3rd, historical section) quite the reverse of that in which it was presented to the public, saving only that the first volume—the last I tackled—was got ready for the press straight away, whereas the two others remained in the rough form which all research originally assumes. ….

In 1865 Marx completed a first draft of volume 3 (McLellan 1995: 304) and then turned to a fresh draft of volume 1, which was in fact a second draft of that first volume (as pointed by Michael Heinrich here).

In February 1866 after being pressed by Engels, Marx agreed to finish and publish volume 1 first (McLellan 1995: 306). He promised to send the first parts of the manuscript to the publisher in November 1866 (McLellan 1995: 306) but took the full manuscript to Hamburg himself in April 1867 (McLellan 1995: 306).

It is likely that, under pressure from Engels to produce a work in defence of communism, Marx’s ideological commitments skewed volume 1 so that it presented capitalism in the worst light possible and an extreme and dogmatic defence of the labour theory of value, which, in view of his work on the draft of volume 3 of Capital, he knew to have severe problems, such as the transformation problem.

As has been pointed out time and again, Marx never bothered to publish volume 2 and 3 of Capital in his lifetime, and the suspicion is that he never did so because he was unsatisfied with his attempts to defend the labour theory in volume 3.

Now Volume 2 of Capital was published by Engels in German in 1885, but even though Marx had revised Volume 2 in the early years of the 1870s Engels preferred to use the first draft of 1864–1865.

What of Volume 3? The manuscripts for Volume 3 from 1864–1865 were in a draft and fragmentary form (Vollgraf and Jungnickel 2002: 68). Engels began editing volume 3 for publication around 1885 but it took him nearly 10 years before that volume was published in 1894 (Vollgraf and Jungnickel 2002: 40). In 1993, Marx’s main 1864–1865 manuscript for volume 3 of Capital which Engels used was published and allowed scholars to compare this with what Engels published in 1894 (Vollgraf and Jungnickel 2002: 36).

Vollgraf and Jungnickel (2002) analyse Engel’s editing and the changes he made to the text, and some of their results are as follows:

(1) Engels’ changes to Marx’s material on the law of the falling rate of profit, including his three chapters and subdivisions, suggested that this work was much more structured and complete than it in fact was (Vollgraf and Jungnickel 2002: 47, 62). The way Engels’ editing obscured Marx’s views on the falling rate of profit is also described by Michael Heinrich here. Heinrich argues that the idea that Marx’s theory of crisis was based on the law of the falling rate of profit is a misinterpretation of Marx’s thought that has arisen from Engels’ editing of the third volume of Capital.

(2) in Chapter 7 Engels missed a number of pages of Marx’s discussion (Vollgraf and Jungnickel 2002: 48).

(3) Engels transformed Marx’s tentative notes for further development into the main text of volume 3, giving the impression that some statements were Marx’s final views on certain issues when they were not (Vollgraf and Jungnickel 2002: 49).

(4) Engels added a considerable amount of material: the material that is marked by Engels as his own comes to about 6% of the main text (Vollgraf and Jungnickel 2002: 53), but there is also material added by Engels but not marked as by him. Engels added Chapter 4, a large part of Chapter 43, additions on the profit rate, historical data from after the 1860s, illustrations from newspapers, and source references (Vollgraf and Jungnickel 2002: 53).

Vollgraf and Jungnickel (2002: 68–69) argue that, given Engels’ additions and modifications to volume 3, the authorship of that work should be rightly ascribed to both Marx and Engels.

BIBLIOGRAPHY
Desai, Meghnad. 2002. Marx’s Revenge: The Resurgence of Capitalism and the Death of Statist Socialism. Verso, London. pp. 74-83

Vollgraf, Carl-Erich and Jürgen Jungnickel. 2002. “‘Marx in Marx’s Words’? On Engels’s Edition of the Main Manuscript of Book 3 of ‘Capital,’” International Journal of Political Economy 32.1: 35–78.

Vygodskii, Vitalii. 2002. “Discussion: What was it actually that Engels published in the years 1885 and 1894? On the Article by Carl-Erich Vollgraf and Jürgen Jungnickel Entitled ‘Marx in Marx’s Words?’” International Journal of Political Economy32.1: 79–82.

I have been so wrapped up in debunking Marxist nonsense recently I forgot that the vulgar internet Austrian cult is a reliable source of stupidity just as bad as Marxism.

In brief, one of the notoriously ignorant commentators on Murphy’s blog made the following assertion about subjective utility in Austrian economics:

“Utility is the subjective appraisement of the usefulness of a means towards end satisfaction. Nothing to do with emotions, happiness or satisfaction out there.”
http://consultingbyrpm.com/blog/2015/05/cardinal-vs.-ordinal-utility.html#comment-1490751

Needless to say, the idea that subjective utility has “[n]othing to do with emotions, happiness or satisfaction” in Austrian theory is so ignorant and wrong it is comical. I provided some quotations from Bob Murphy’s own published work refuting this, but apparently that is not enough (indeed it is “grossly unfair,” Bob Murphy complains, for me to quote passages of his work that refute vulgar Austrians!).

Well, we need only look at these passages in random works of Mises and Rothbard to see how they explicitly link subjective utility with the emotions or states of mind we call pleasure or happiness:

“If anyone believes that he can explain every human want, or every class of human wants constructed by him, by correlating with it a particular impulse, instinct, propensity, or feeling, then he is certainly not to be forbidden to do so. Not only do we not deny that men desire, want, and aim at different things, but we start precisely from this fact in our reflections. When science speaks of pleasure, happiness, utility, or wants, these signify nothing but what is desired, wished for, and aimed at, what men regard as ends and goals, what they lack, and what, if procured, satisfies them. These terms make no reference whatever to the concrete content of what is desired: the science is formal and neutral with regard to values. The one declaration of the science of ‘happiness’ is that it is purely subjective. In this declaration there is, therefore, room for all conceivable desires and wants. Consequently, no statement about the quality of the ends aimed at by men can in any way affect or undermine the correctness of our theory.” (Mises 2003: 59).

“The modern concept of pleasure, happiness, utility, satisfaction and the like includes all human ends, regardless of whether the motives of action are moral or immoral, noble or ignoble, altruistic or egotistical.

In general men act only because they are not completely satisfied. Were they always to enjoy complete happiness, they would be without will, without desire, without action. In the land of the lotus-eaters there is no action. Action arises only from need, from dissatisfaction. It is purposeful striving towards something. Its ultimate end is always to get rid of a condition which is conceived to be deficient—to fulfil a need, to achieve satisfaction, to increase happiness.” (Mises 2009: 112–113).

“The natural law, then, elucidates what is best for man — what ends man should pursue that are most harmonious with, and best tend to fulfill, his nature. In a significant sense, then, natural law provides man with a ‘science of happiness,’ with the paths which will lead to his real happiness. In contrast, praxeology or economics, as well as the utilitarian philosophy with which this science has been closely allied, treat ‘happiness’ in the purely formal sense as the fulfillment of those ends which people happen — for whatever reason — to place high on their scales of value. Satisfaction of those ends yields to man his ‘utility’ or ‘satisfaction’ or ‘happiness.’ Value in the sense of valuation or utility is purely subjective, and decided by each individual.” (Rothbard 1998: 12).

This seems pretty clear to me, but not, I suppose, to the hordes of vulgar internet Austrians plaguing the internet.

“With reference to the theory of value, it will be convenient to follow Marx in his fundamental analysis of the process of exchange.

He begins by pointing out that the fact of two wares being exchangeable (no matter in what proportion) implies of necessity both Verschiedenheit and Gleichheit; i.e. that they are not identical (else the exchange would leave things exactly where it found them), and that they are different manifestations or forms of a common something (else they could not be equated against each other). In other words, things which are exchangeable must be dissimilar in quality, but yet they must have some common measure, by reduction to which the equivalent portions of each will be seen to be identical in quantity.

Now with regard to the qualitative dissimilarity, I do not see that there is any room for difference of opinion. It consists in the divergent nature of the services rendered by the respective wares. Cast-iron nails and new-laid eggs differ in respect to their ‘value in use.’ They serve different purposes. Even a red and a blue ribbon, though they both serve purposes of adornment, are capable each of rendering some particular services of adornment under circumstances which would make the other a mere disfigurement. I agree with Marx, then, that the Verschiedenheit of the wares is to be found in the respective Gebrauchswerth of each, or, as I should express it, commodities differ one from another in their specific utilities.

But in what does the Gleichheit consist? What is the common something of which each ware is a more or less? Marx replies that to get at this something, whatever it is, we must obviously set on one side all geometrical, physical, chemical and other natural properties of the several wares, for it is precisely in these that they differ from one another, and we are seeking that in which they are all identical. Now in setting aside all these natural properties, we are setting aside all that gives the wares a value in use, and there is nothing left them but the single property of being products of labour. But the wares, as they stand, are the products of many different kinds of labour, each of which was engaged in conferring upon them the special physical properties in virtue of which they possess specific utilities. Now to get at that in which all wares are identical we have been obliged to strip off all these physical properties in which they differ, so that if we still regard them as products of labour, it must be labour that has no specific character or direction, mere ‘abstract and indifferent human labour,’ the expenditure of so much human brain and muscle, etc. The Gleichheit, then, of the several wares consists in the fact that they are all products of abstract human labour, and the equation x of ware A = y of ware B, holds in virtue of the fact that it requires the same amount of abstract human labour to produce x of ware A or y of ware B … .

Now the leap by which this reasoning lands us in labour as the sole constituent element of value appears to me so surprising that I am prepared to learn that the yet unpublished portions of Das Kapital contain supplementary or elucidatory matter which may set it in a new light. Meanwhile the analysis appears to be given as complete and adequate, so far as it goes, and I can, therefore, only take it as I find it and try to test its validity. But instead of directly confronting it with what seems to be the true analysis of the phenomenon of exchange, I will follow it out a little further, and we shall see that Marx himself introduces a modification into his result (or develops a half-latent implication in it), in such a way as to vitiate the very analysis on which that result is founded, and to lead us, if we work it out, to what I regard as the true solution of the problem.

A few pages, then, after we have been told that wares regarded as ‘valuables’ must be stripped of all their physical attributes, i.e. of everything that gives them their value in use, and reduced to one identical spectral objectivity, as mere jellies of undistinguishable abstract human labour, and that it is this abstract human labour which constitutes them valuables, we find the important statement that the labour does not count unless it is useful (pp. 15, 16, 64 [16a, 35a]). Simple and obvious as this seems, it in reality surrenders the whole of the previous analysis, for if it is only useful labour that counts, then in stripping the wares of all the specific properties conferred upon them by specific kinds of useful work, we must not be supposed to have stripped them of the abstract utility, conferred upon them by abstractly useful work. If only useful labour counts, then when the wares are reduced to mere indifferent products of such labour in the abstract, they are still useful in the abstract, and therefore it is not true that ‘nothing remains to them but the one attribute of being products of labour’ (p. 12 [146]), for the attribute of being useful also remains to them. In this all wares are alike.” (Wicksteed 1933: 710–712 = Wicksteed 1884).

We can see here that Marx’s flawed argument attempting to prove the labour theory of value was spotted by Wicksteed early on.

Moreover, Wicksteed’s criticism of Marx’s argument for the labour theory and his broader critique was so influential that George Bernard Shaw (1856–1950) abandoned his early flirtation with Marxism (Shaw 1885 = Shaw 1933), and was one of the many factors that caused the emerging British socialist movement to largely free itself from Marxist dogma.

Furthermore, as Wicksteed points out, under Marx’s initial argument, we could just as easily argue that there is indeed a common basis for a commodity exchange, and this is that both goods exchanged have subjective utility to the people receiving them in the trade:

“The exchange of two wares implies a heterogeneity (Verschiedenheit) and a homogeneity (Gleichheit). This is implied in the fact that they are exchangeable. And here I must challenge the attention of students of Das Kapital to the fact that the analysis by which ‘labour’ is reached as the ultimate constituent element of (exchange) value, starts from the naked fact of exchangeability and is said to be involved in that fact. It is true that in the instances given by Marx the articles exchanged are wares (i.e. commodities which have been produced for the express purpose of exchange), and moreover wares which can practically be produced in almost unlimited quantities. It is true also that Marx elsewhere virtually defines value so as to make it essentially dependent upon human labour (p. 81 [43a]). But for all that his analysis is based on the bare fact of exchangeability. This fact alone establishes Verschiedenkeit and Gleichheit, heterogeneity and homogeneity. Any two things which normally exchange for each other, whether products of labour or not, whether they have, or have not, what we choose to call value, must have that ‘common something’ in virtue of which things exchange and can be equated with each other; and all legitimate inferences as to wares which are drawn from the bare fact of exchange must be equally legitimate when applied to other exchangeable things.

Now the ‘common something,’ which all exchangeable things contain, is neither more nor less than abstract utility, i.e. power of satisfying human desires.” (Wicksteed 1933: 710–712 = Wicksteed 1884).

Although Wicksteed is wrong to go on from this to Jevonian marginal utility analysis with a quantitative measure of utility, he is still correct in one respect: you could just as easily conclude, contrary to Marx, that some kind of subjective utility is the common, underlying and necessary element of the exchange of commodities, though there does not need to be an equality of subjective utility. Rather, when one person exchanges one good for another, it seems likely that in most cases he values the good he receives more highly than the good he gives up in the trade, and the same thing can be said of the other person in the trade.

Indeed Marx’s argument in Capital here as it stands is badly flawed:

“Let us take two commodities, e. g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: e. g., 1 quarter corn=x cwt. iron. What does this equation tell us? It tells us that in two different things—in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third.” (Marx 1906: 43–44).

Now in a barter exchange, there is an equality in the sense in which, say, 2 sheep might exchange for 1 cow, and only two sheep and nothing more are exchanged, and vice versa. But this is trivial sense of equality. There is no further and obvious logical or empirical sense that the exchange is an equality of some third quantity, such as abstract socially-necessary labour time.

Marx’s leap to the conclusion that there must be an additional, fundamental unit in which both commodities can be measured quantitatively and by which they can both be shown to be equivalent simply does not follow. It is a non sequitur. Marx’s argument was shoddy and commits a straightforward logical fallacy.

BIBLIOGRAPHY
Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

Wednesday, May 20, 2015

Steve Keen gives a talk below on neoclassical economics and an alternative monetary macroeconomics, held in Tel Aviv, Israel at the invitation of the Rethinking Economics Student Forum. More details here.

Tuesday, May 19, 2015

“In the same way the exchange values of commodities must be capable of being expressed in terms of something common to them all, of which thing they represent a greater or less quantity.

This common ‘something’ cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use-values. But the exchange of commodities is evidently an act characterised by a total abstraction from use-value.” ….

If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour. But even the product of labour itself has undergone a change in our hands. If we make abstraction from its use-value, we make abstraction at the same time from the material elements and shapes that make the product a use-value; we see in it no longer a table, a house, yarn, or any other useful thing. Its existence as a material, thing is put out of sight. Neither can it any longer be regarded as the product of the labour of the joiner, the mason, the spinner, or of any other definite kind of productive labour. Along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them, and the concrete forms of that labour; there is nothing left but what is common to them all; all are reduced to one and the same sort of labour, human labour in the abstract.” (Marx 1906: 44–45).

According to Marx’s argument, we must totally abstract from a commodity’s “use value” to determine the ultimate thing that underlies the equality of exchange and what ultimately determines exchange value.

However, that is blatantly and disastrously contradicted later in the same Chapter when Marx makes this admission:

“Lastly, nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value.” (Marx 1906: 48).

This is exactly like having your cake and eating it too.

On the one hand, we can totally ignore use value in ultimately explaining exchange values, but on the other hand – only a few pages later – nothing without utility (by which Marx no doubt means “use value”) can create value and by implication price. This is a bad contradiction, and requires that being an object of utility is a necessary condition not only for having labour value but also an exchange value.

Marx cannot be correct in saying that “the exchange of commodities is evidently an act characterised by a total abstraction from use-value” (my emphasis), if “nothing can have value, without being an object of utility” (Percival 2012: 253).

But it is worse than this. Later we read the following:

“The social division of labour causes his labour to be as one-sided as his wants are many-sided. This is precisely the reason why the product of his labour serves him solely as exchange value. But it cannot acquire the properties of a socially recognised universal equivalent, except by being converted into money. That money, however, is in some one else’s pocket. In order to entice the money out of that pocket, our friend’s commodity must, above all things, be a use-value to the owner of the money. For this, it is necessary that the labour expended upon it, be of a kind that is socially useful, of a kind that constitutes a branch of the social division of labour. But division of labour is a system of production which has grown up spontaneously and continues to grow behind the backs of the producers. The commodity to be exchanged may possibly be the product of some new kind of labour, that pretends to satisfy newly arisen requirements, or even to give rise itself to new requirements. A particular operation, though yesterday, perhaps, forming one out of the many operations conducted by one producer in creating a given commodity, may to-day separate itself from this connection, may establish itself as an independent branch of labour and send its incomplete product to market as an independent commodity. The circumstances may or may not be ripe for such a separation. To-day the product satisfies a social want. To-morrow the article may, either altogether or partially, be superseded by some other appropriate product. Moreover, although our weaver’s labour may be a recognised branch of the social division of labour, yet that fact is by no means sufficient to guarantee the utility of his 20 yards, of linen. If the community's want of linen, and such a want has a limit like every other want, should already be saturated by the products of rival weavers, our friend’s product is superfluous, redundant, and consequently useless. Although people do not look a gift-horse in the mouth, our friend does not frequent the market for the purpose of making presents. But suppose his product turn out a real use-value, and thereby attracts money? The question arises, how much will it attract? No doubt the answer is already anticipated in the price of the article, in the exponent of the magnitude of its value. We leave out of consideration here any accidental miscalculation of value by our friend, a mistake that is soon rectified in the market. We suppose him to have spent on his product only that amount of labour-time that is on an average socially necessary. The price then, is merely the money-name of the quantity of social labour realised in his commodity. But without the leave, and behind the back, of our weaver, the old fashioned mode of weaving undergoes a change. The labour-time that yesterday was without doubt socially necessary to the production of a yard of linen, ceases to be so today, a fact which the owner of the money is only too eager to prove from the prices quoted by our friend’s competitors. Unluckily for him, weavers are not few and far between. Lastly, suppose that every piece of linen in the market contains no more labour-time than is socially necessary. In spite of this, all these pieces taken as a whole, may have had superfluous labour-time spent upon them. If the market cannot stomach the whole quantity at the normal price of 2 shillings a yard, this proves that too great a portion of the total labour of the community has been expended in the form of weaving. The effect is the same as if each individual weaver had expended more labour-time upon his particular product than is socially necessary. Here we may say, with the German proverb: caught together, hung together. All the linen in the market counts but as one article of commerce, of which each piece is only an aliquot part. And as a matter of fact, the value also of each single yard is but the materialised form of the same definite and socially fixed quantity of homogeneous human labour.” (Marx 1906: 119–121.

Here Marx is actually saying that the amount of abstract socially necessary labour time appropriate for the production of any given commodity is not independent of the market demand for that commodity: market demand will determine the socially necessary labour time for each unit, so that if there is an excess of supply in relation to demand, then the amount of social labour expended in the production of the aggregate output has been too high and some labour time wasted: it is as if all labourers had spent more time than was socially necessary for the production of each unit.

At this point, Marx’s socially necessary labour time as an independent determiner of exchange value or price has been shaken to its foundations. For in the example above market exchange actually determines unit abstract socially necessary labour time.

Marx cannot (1) explain exchange value or price independently of use value, nor (2) can he explain the abstract socially necessary labour time supposedly required for the production of any given commodity independently of market demand.

BIBLIOGRAPHY
Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

Percival, Ray Scott. 2012. The Myth of the Closed Mind: Understanding Why and How People are Rational. Open Court, Chicago.

Sunday, May 17, 2015

Many Marxist interpreters argue that in volume 1 of Capital Marx assumes as a simplifying assumption that all commodities exchange at their labour value, that is, at prices directly corresponding to the abstract socially-necessary labour time (SNLT) required to produce them (e.g., Mandel 1990: 31). Indeed, in an obscure footnote to Chapter 9 of volume 1 of Capital Marx does say that in the examples he gives in Chapter 9 he assumes that prices equal labour value (Marx 1990: 329, n. 9).

But, if we accept this, it just raises the question: how and under what conditions could commodity prices in a capitalist economy actually equal abstract socially-necessary labour time (SNLT) as Marx defines it?

The following conditions would be necessary:

(1) demonstrate how to reduce all heterogeneous human wage labour to a common, meaningful homogeneous unit of abstract labour time;

(2) calculate the SNLT required to produce all commodities and assign a consistent money unit to 1 unit of SNLT, e.g., 1 money unit would consistently equal one unit of homogeneous labour time;

(3) price all commodities and non-labour factor inputs in terms of socially necessary labour time required to produce them with the assigned money value of 1 unit of SNLT.

(4) under these conditions of course, we must assume also that workers are not paid the full and proper value of their labour in wage rates corresponding to SNLT, and that there is surplus labour value and money profit extracted by capitalists.

But it is perfectly obvious that this is not how capitalism prices goods and even as a simplifying assumption it throws up all sorts of severe problems for Marx’s economic theories.

For one thing, the choice of what money unit you assign to 1 unit of SNLT is ultimately arbitrary, and at different money rates corresponding to one unit of SNLT (say, 1, 2, 3, 4, 5, 6, 7 etc.) you can potentially have any number of given price sets corresponding to SNLT, and any number of accidental instances where a real world commodity price might equal SNLT, under a given price set with a given money rate assigned to 1 unit of SNLT.

Under another standard interpretation, Marx in volume 3 of Capital sheds his simplifying assumption in volume 1 and assumes that most prices do not actually equal SNLT (and even average long-run Classical equilibrium prices do not directly do so), but only by accident do some occasional prices do so. But how on earth would you know when any individual real world market commodity price equals the SNLT required to produce it?

Marx does not explain how in real world markets a given commodity price would equal the SNLT needed to produce it, because it is never properly made clear how you determine such a price in the first place. Marx’s whole theory, even as a simplifying assumption and even in volume 1, is grossly under-determined and ambiguous.

By contrast, Temporal Single System Marxism, according to Mongiovi, is as much a critique of Sraffa as it is of Bortkiewicz and Sweezy.

In volume 3 of Capital Marx set out to prove three aggregate equalities:

(1) the sum of surplus value = sum of profits

(2) the sum of values = sum of prices, and

(3) the value rate of profit = the money rate of profit.

Ladislaus Bortkiewicz criticised Marx’s arguments that attempt to establish these identities, but the Temporal Single System Marxists argue that Bortkiewicz’s criticisms of Marx apply only to a Classical long-period equilibrium interpretation of Marx’s value theory, and that this long period interpretation is wrong and a misrepresentation of Marx’s views (Mongiovi 2002: 409).

Mongiovi charges the Temporal Single System Interpretation with the following flaws and errors:

(1) the concept of labour value, contrary to Marx, is reduced by the Temporal Single System Interpretation merely to price (Mongiovi 2002: 406, n. 20);

(2) the Temporal Single System Interpretation’s attempt to deny that Marx’s economics was in the tradition of long period Classical equilibrium theory is wrong (Mongiovi 2002: 402, 412).

(3) the Temporal Single System Interpretation attempts to defend the propositions that the (1) sum of profits equals the sum of surplus value and (2) the sum of prices equals the sum of values by reducing this to an idiosyncratic and empirically empty pure mathematical identity that is a sleight of hand (in other words, by an analytic mathematical propositions merely true by definition) (Mongiovi 2002: 405–406, 413);

(4) Temporal Single System Interpretation Marxists focus on random passages in Marx and take these passages out of context to prove their own idiosyncratic ideas (Mongiovi 2002: 409–411).

On (2), there seems to be good evidence that Marx really did conceive his economic theories firmly in the Classical long-run equilibrium position. For example, the evidence for how Marx regarded “average price,” “cost-price” or “price of production” as the long run Classical “natural price” is superbly presented in Fred Moseley’s paper “Marx’s Concept of Prices of Production: Long-Run Center-of-Gravity Prices,” which demonstrates how the Temporal Single System Interpretation badly misunderstands Marx’s concept of the “price of production.”

Also, very interesting is that the Temporal Single System Interpretation seems to reduce the concept of abstract labour time values merely to prices, which are just given and assumed to represent labour values.

All in all, none of this inspires much confidence in the Temporal Single System Interpretation of Marx.

Friday, May 15, 2015

(1) the exchange values or prices of goods produced in pre-modern or tribal societies for ceremonial purposes or gift exchange;

(2) non-reproducible commodities, whether antiques, works of art by certain artists or masters, objects or goods signed by famous people sold on markets, letters or writings by famous people, vintage wine, etc.

(3) second-hand goods, and

(4) the prices of financial and real assets bought and sold on secondary asset markets.

With regard to (2), Marx himself admits this in volume 3 of Capital and states that prices of things which “cannot be reproduced by labour, such as antiques, works of art by certain masters, etc. … may be determined by quite fortuitous combinations of circumstances” (Marx 1991: 772).

As we survey the list, we can see that it removes quite a vast swathe of goods from the purview of the labour theory, but it includes goods of a high economic significance like secondary financial and real assets.

The labour theory of value, then, cannot provide a universal theory of price determination nor explain why businesses earn profits in dealing antiques, works of art, or second hand goods, or why profits occur in businesses dealing in organising or intermediating the purchasing of secondary financial and real assets.

Even worse, Marx distinguished between so-called “productive” and “unproductive” labour and argued that vast sections of what we would now call the service economy do not add surplus value, even though they manifestly do produce profits and satisfy human wants and needs. If profits exist in these sectors but according to Marx they do not produce surplus value, we have yet another gaping hole in Marx’s theory of capitalism.

Thursday, May 14, 2015

On March 11, 1895, Friedrich Engels – only a few months before his death on August 5, 1895 – wrote a letter to the German Historical School economist Werner Sombart (1863–1941) concerning the labour theory of value. Sombart had written the following critical review of Marx’s economic theories:

In this essay, Sombart had said that the labour theory of value as presented in volume 1 of Capital had no place in real life and was not an empirical concept but a purely “mental” one (Boudin 1920: 134).

Engels’ letter is an astonishing insight into what Engels thought in private about the labour value theory in 1895:

“Dear Sir,

Replying to your note of the 14th of last month, may I thank you for your kindness in sending me your work on Marx; I had already read it with great interest in the issue of the Archiv which Dr. H. Braun was good enough to send me, and was pleased for once to find such understanding of Capital at a German University. Naturally I can’t altogether agree with the wording in which you render Marx’s exposition. Especially the definitions of the concept of value which you give on pages 576 and 577 seem to me to be rather all-embracing: I would first limit them historically by explicitly restricting them to the economic phase in which alone value has up to now been known, and could only have been known, namely, the forms of society in which commodity exchange, or commodity production, exists; in primitive communism value was unknown. And secondly it seems to me that the concept could also be defined in a narrower sense. But this would lead too far, in the main you are quite right.

Then, however, on page 586, you appeal directly to me, and the jovial manner with which you hold a pistol to my head made me laugh. But you need not worry, I shall “not assure you of the contrary.” The logical sequence by which Marx deduces the general and equal rate of profit from the different values of s / C = s / (c + v) produced in various capitalist enterprises is completely foreign to the mind of the individual capitalist. Inasmuch as it has a historical parallel, that is to say, as far as it exists in reality outside our heads, it manifests itself for instance in the fact that certain parts of the surplus value produced by capitalist A over and above the rate of profit, or above his share of the total surplus value, are transferred to the pocket of capitalist B whose output of surplus value remains as a rule below the customary dividend. But this process takes place objectively, in the things, unconsciously, and we can only now estimate how much work was required in order to achieve a proper understanding of these matters. If the conscious co-operation of the individual capitalists had been necessary to establish the average rate of profit, if the individual capitalist had known that he produces surplus value and how much of it, and that frequently he has to hand over part of his surplus value, then the relationship between surplus value and profit would have been fairly obvious from the outset and would presumably have already been described by Adam Smith, if not Petty.

According to Marx’s views all history up to now, in the case of big events, has come about unconsciously, that is, the events and their further consequences have not been intended; the ordinary actors in history have either wanted to achieve something different, or else what they achieved has led to quite different unforeseeable consequences. Applied to the economic sphere: the individual capitalists, each on his own, chase after the biggest profit. Bourgeois economy discovers that this race in which every one chases after the bigger profit results in the general and equal rate of profit, the approximately equal ratio of profit for each one. Neither the capitalists nor the bourgeois economists, however, realise that the goal of this race is the uniform proportional distribution of the total surplus value calculated on the total capital.

But how has the equalisation been brought about in reality? This is a very interesting point, about which Marx himself does not say much. But his way of viewing things is not a doctrine but a method. It does not provide ready-made dogmas, but criteria for further research and the method for this research. Here therefore a certain amount of work has to be carried out, since Marx did not elaborate it himself in his first draft. First of all we have here the statements on pages 153-156, III, I, which are also important for your rendering of the concept of value and which prove that the concept has or had more reality than you ascribe to it. When commodity exchange began, when products gradually turned into commodities, they were exchanged approximately according to their value. It was the amount of labour expended on two objects which provided the only standard for their quantitative comparison. Thus value had a direct and real existence at that time. We know that this direct realisation of value in exchange ceased and that now it no longer happens. And I believe that it won’t be particularly difficult for you to trace the intermediate links, at least in general outline, that lead from directly real value to the value of the capitalist mode of production, which is so thoroughly hidden that our economists can calmly deny its existence. A genuinely historical exposition of these processes, which does indeed require thorough research but in return promises amply rewarding results, would be a very valuable supplement to Capital.

Finally, I must also thank you for the high opinion which you have formed of me if you consider that I could have made something better of volume III. I cannot share your opinion, and believe I have done my duty by presenting Marx in Marx’s words, even at the risk of requiring the reader to do a bit more thinking for himself. ...”
Letter, Engels to W. Sombart, from London, March 11, 1895
https://www.marxists.org/archive/marx/works/1895/letters/95_03_11.htm

Let us look at that crucial passage again below:

“When commodity exchange began, when products gradually turned into commodities, they were exchanged approximately according to their value. It was the amount of labour expended on two objects which provided the only standard for their quantitative comparison. Thus value had a direct and real existence at that time. We know that this direct realisation of value in exchange ceased and that now it no longer happens. And I believe that it won’t be particularly difficult for you to trace the intermediate links, at least in general outline, that lead from directly real value to the value of the capitalist mode of production, which is so thoroughly hidden that our economists can calmly deny its existence. A genuinely historical exposition of these processes, which does indeed require thorough research but in return promises amply rewarding results, would be a very valuable supplement to Capital.”

According to Engels, it was only in the distant past when commodity exchanges actually started to begin that labour time was used as a method by which to fix exchange values: it was only then that “value had a direct and real existence.” But then “direct realisation of value in exchange ceased and ... now it no longer happens.” It is remarkable that Engels doesn’t even attempt to defend the idea that abstract socially-necessary labour time determines exchange values in modern capitalism either.

Engels was giving the whole game away in this letter – and admitting that the exposition of the labour theory of value in volume 1 of Capital is a fiction.

Either that or Marx was one of the most incompetent economic writers of all time, for in Chapter 1 of volume 1 of Capital Marx should have carefully qualified his whole account with exactly the type of qualifications that Engels makes in this letter: that only in the ancient world when human beings first started to exchange goods did labour time supposedly determine exchange value. But in that case Marx’s exposition of the labour theory would have been essentially the same as that of Adam Smith:

“In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days’ or two hours’ labour, should be worth double of what is usually the produce of one day’s or one hour’s labour.

If the one species of labour should be more severe than the other, some allowance will naturally be made for this superior hardship; and the produce of one hour’s labour in the one way may frequently exchange for that of two hours’ labour in the other.

Or if the one species of labour requires an uncommon degree of dexterity and ingenuity, the esteem which men have for such talents will naturally give a value to their produce, superior to what would be due to the time employed about it. Such talents can seldom be acquired but in consequence of long application, and the superior value of their produce may frequently be no more than a reasonable compensation for the time and labour which must be spent in acquiring them. In the advanced state of society, allowances of this kind, for superior hardship and superior skill, are commonly made in the wages of labour; and something of the same kind must probably have taken place in its earliest and rudest period.

In this state of things, the whole produce of labour belongs to the labourer; and the quantity of labour commonly employed in acquiring or producing any commodity is the only circumstance which can regulate the quantity exchange for which it ought commonly to purchase, command, or exchange for.” (Smith 1845: 20).

So here we see that the view Engels communicated to Sombart was, more or less, one that could be found in Adam Smith.

How credible is it? Not very. As a matter of fact, Piero Sraffa examined this question in the late 1920s by studying the anthropological and historical literature of his day, such as F. R. Eldridge’s Oriental Trade Methods (1923), Karl Bücher’s Industrial Evolution, Raymond Firth’s Primitive Economics of the New Zealand Maori (1929), and E. E. Hoyt’s Primitive Trade. Its Psychology and Economics (1926) and other works (Kurz and Salvadori 2010: 200–202). Sraffa found no evidence that time and labour played the fundamental role in determining exchange value in non-Western and less economically-developed societies (Kurz and Salvadori 2010: 200–201).

Now the modern reader will no doubt complain that 1920s anthropology was tainted by a certain Western bigotry, prejudice and ignorance and I would not doubt this, but certain facts do still stand out. Bücher (1907: 19), for example, noted that in the absence of modern time-keeping methods, tribal societies seem to face severe difficulties even properly measuring time. How, then, can they have relied on labour time as the fundamental determinant of exchange value in the distant past?

Admittedly, I have not done a detailed survey of the most recent anthropological and historical literature on this question, but a quick look suggests that modern anthropology seems to confirm what Sraffa found, and that subjective utility, reciprocal satisfaction, ceremonial exchange, and fairness play the fundamental role in ancient and non-Western exchange of commodities, not labour time (e.g., Sahlins 1972; Firth 1965: 342; Gregory 2002). Indeed, the non-Western practice of “silent trade” in commodities where the parties do not even meet directly (Dale 2010: 91) appears to make a nonsense of the idea that ancient people determined exchange values in real commodity (and not ceremonial or social) exchange by labour time.

If the modern literature upholds what Sraffa found, then not even Engels’ weak version of the labour theory of value can be taken seriously.

Kurz, Heinz D. and Neri Salvadori. 2010. “Sraffa and the Labour Theory of Value: A Few Observations,” in John Vint et al. (eds.), Economic Theory and Economic Thought: Essays in Honour of Ian Steedman. Routledge, London and New York. 189–215.

Now some scholars have argued that Engels reworked Marx’s thought, and even that there were actually significant differences between Engels’ version of communism and that of Marx, such as in Norman Levine’s The Tragic Deception: Marx contra Engels (1975) (Hunt 2009: 301). To some extent some of these arguments are made by Marxists who want to whitewash Marx and exonerate him from the horrors of communism, but there seems to be some truth to the view that it was Engels who popularised Marx’s work in the 1880s (Hunt 2009: 282). Yet, at the same time, Marx seems to have fully endorsed the Anti-Dühring (1878) so that it accurately represented his mature thought (Hunt 2009: 301–302).

(2)Herr Eugen Dühring’s Revolution in Science (1878)
This work is often known simply as the Anti-Dühring and was first published in German serialised in a periodical. Three German editions appeared in 1878, 1886 and 1894. The first English translation appeared in 1907:

In the review, Dühring had criticisms of the labour theory of value, and Marx in a letter to Engels on the 8th January, 1868 had the following to say about Dühring’s review:

Dear Fred,

With regard to Dühring. It is a great deal from this man that he almost positively receives the section on Primitive Accumulation. He is still young. As a follower of Carey, he is in direct opposition to the free-traders. Added to this he is a university lecturer and therefore not grieved that Professor Roscher, who blocks the way for all of them, should get some kicks. One thing in his appraisal has struck me very much. Namely, so long as the determination of value by working time is left ‘vague’, as it is with Ricardo, it does not make people shaky. But as soon as it is brought into exact connection with the working day and its variations, a very unpleasant new light dawns upon them. I believe that an additional reason for Dühring to review my book at all was malice against Roscher. His fear of being treated like Roscher is certainly very easily perceptible. It is strange that the fellow does not sense the three fundamentally new elements of the book:

1) That in contrast to all former political economy, which from the very outset treats the different fragments of surplus value with their fixed forms of rent, profit, and interest as already given, I first deal with the general form of surplus value, in which all these fragments are still undifferentiated – in solution, as it were.

2) That the economists, without exception, have missed the simple point that if the commodity has a double character – use value and exchange value – then the labour represented by the commodity must also have a two-fold character, while the mere analysis of labour as such, as in Smith, Ricardo, etc, is bound to come up everywhere against inexplicable problems. This is, in fact, the whole secret of the critical conception.

3) That for the first time wages are presented as an irrational manifestation of a relation concealed behind them, and that this is scrupulously demonstrated with regard to the two forms of wages – time rates and piece rates. (It was a help to me that similar formulae are often found in higher mathematics.)

And as for Dühring’s modest objections to the determination of value, he will be astonished to see in Volume 2 [sc. of Capital] how little the determination of value ‘directly’ counts in bourgeois society. Indeed, no form of society can prevent the working time at the disposal of society from regulating production one way or another. So long, however, as this regulation is accomplished not by the direct and conscious control of society over its working time – which is possible only with common ownership – but by the movement of commodity prices, things remain as you have already quite aptly described them in the Deutsch-Französische Jahrbücher...
Letter of Karl Marx to Friedrich Engels in Manchester, 8 January 1868
https://www.marxists.org/archive/marx/works/1868/letters/68_01_08.htm

It is the passage at the end that interests me: when Marx said that Dühring would be “astonished to see in Volume 2 how little the determination of value ‘directly’ counts in bourgeois society,” what did he mean by this?

Earlier in the letter, Marx notes that if the theory of labour value as a determination of price is left “vague” or “underdetermined” (the latter word is used in the translation of this letter in Marx and Engels 1987: 514), then people do not seem to have so much doubt about it. The gist of what Marx is saying here appears to be that, when he attempts to explain how labour value actually determines price, this is when the troubles begin.

But the final statement of Marx seems to me to be very significant:

“So long, however, as this regulation is accomplished not by the direct and conscious control of society over its working time – which is possible only with common ownership – but by the movement of commodity prices, things remain as you have already quite aptly described them in the Deutsch-Französische Jahrbücher...”

This is significant because Marx wrote this in 1868 after volume 1 of Capital had been published in 1867.

Marx appears to be saying that when labour time’s relation to value is determined by the “movement of commodity prices” then labour time counts for little and prices are actually determined as described by Engels in his essay “Outlines of a Critique of Political Economy” in Deutsch-Französische Jahrbücher (1844).

But a careful reading of this essay shows that Engels, although he thought that labour is the main factor in production and the fundamental “source of wealth,” nevertheless did not think that abstract socially necessary labour time determines exchange value.

Instead, for Engels, exchange value is determined by (1) cost of production and (2) the interaction of supply and demand:

“It is, however, quite correct, and a fundamental law of private property, that price is determined by the reciprocal action of production costs and competition. This purely empirical law was the first to be discovered by the economist; and from this law he then abstracted his ‘real value,’ i.e., the price at the time when competition is in a state of equilibrium, when demand and supply cover each other. Then, of course, what remains over are the costs of production and it is these which the economist proceeds to call ‘real value,’ whereas it is merely a definite aspect of price.”
Frederick Engels, “Outlines of a Critique of Political Economy,” Deutsch-Französische Jahrbücher, 1844
https://www.marxists.org/archive/marx/works/1844/df-jahrbucher/outlines.htm

If Marx was agreeing with Engels that in reality prices in real world capitalism are not determined by abstract socially necessary labour time, then this was a frank admission by Marx in private to Engels that the analysis in volume 1 of Capital was grossly deficient and misleading.

For in volume 1 of Capital, Marx does try to explain individual commodity prices in terms of their abstract socially necessary labour time (SNLT). For example, Marx argues that rising unit SNLT in a reduced cotton crop after a bad harvest is supposed to explain the rising price of cotton and even the price rise of cotton produced in previous production (Marx 1982: 317–318). Marx argues that when commodities exchange for one another, this is because there is ultimately an equality of socially necessary labour time embodied in them (Marx 1982: 124, 127–128). Even worse Marx wants to make prices directly corresponding to SNLT an anchor or equilibrium value around which market prices fluctuate:

“The production of commodities must be fully developed before the scientific conviction emerges, from experience itself, that all the different kinds of private labour (which are carried on independently of each other; and yet, as spontaneously developed branches of the social division of labour, are in a situation of all-round dependence on each other) are continually being reduced to the quantitative proportions in which society requires them. The reason for this reduction is that in the midst of the accidental and ever-fluctuating exchange relations between the products, the labour-time socially necessary to produce them asserts itself as a regulative law of nature. In the same way, the law of gravity asserts itself when a person’s house collapses on top of him. The determination of the magnitude of value by labour-time is therefore a secret hidden under the apparent movements in the relative values of commodities.” (Marx 1982: 168).

But if market prices are not determined in this way, but by cost of production and the interaction of supply and demand, then this makes a nonsense of Marx’s statements in volume 1 of Capital.

I can only conclude that there is a fundamental contradiction in Marx’s thinking here, and that Marx’s letter to Engels of 8 January, 1868 was a private and tacit admission of this contradiction too.

Sunday, May 10, 2015

Volume 1 of Karl Marx’s Capital was published in German in 1867, and only volume 1 of Capital was published in Marx’s lifetime. Volume 1 and 2 were edited and published by Engels. Furthermore, no English translation appeared of volume 1 in Marx’s lifetime.

Marx did, however, publish a second German edition of volume 1 in 1872–1873 and supervised a French translation in 1875, and Engels edited a third German edition in 1883 and then a fourth German edition published in 1890.

The first English translation of volume 1 of Capital appeared in 1887 supervised by Engels.

We can list these editions as follows:

(1) volume 1 of Capital in German published in a first edition of 1867.

(2) volume 1 of Capital in German published in a second edition of 1872–1873 with additions and changes by Marx.

(3) volume 1 of Capital in a French translation in 1875, with a number of changes to and corrections of the first German edition by Marx.

(4) volume 1 of Capital in a third German edition with corrections and notes from the manuscripts of Marx and from the French translation edited and published by Engels in 1883.

(5) the first English translation of volume 1 of Capital in 1887 after Marx’s death in this edition:

Saturday, May 9, 2015

Michel Foucault (15 October 1926–25 June 1984) was a French philosopher and a major member of the French Poststructuralist movement, from which emerged modern Postmodernism. Modern Postmodernism contains two influential strands: one from the work of Jacques Derrida and the other from Foucault. The strand associated with Michel Foucault is derived from his work on power, knowledge and a relativist view of truth (for Foucault’s works see below).

Foucault was a radical leftist and a Marxist early in his career, and, even though he later repudiated Marxism, a certain type of Marxist class analysis is evident in his work. In his mature views, Foucault was a left libertarian or anarchist who distrusted all institutions, and who was in some respects a trailblazing advocate of identity politics and minority cultures. Foucault was also a representative of neo-Nietzschean thought in the late 20th century, albeit in rather original ways. Nietzschean irrationalism was a central element of Foucault’s thought, as was his denial of objective truth.

I regard Foucault’s work and Postmodernism in general as deeply flawed and a terrible blight on the intellectual life of the left. The central element of Foucault’s work was his rejection of objective truth – a self-defeating and absurd idea that lies at the heart of all irrationalism. Moreover, Foucault’s historical work – whether it was on madness, mental asylums, prisons, or the history of science – has very serious problems, errors and theoretical difficulties.

I collect below my posts criticising Foucault’s philosophy. A number of my critiques of Foucault are based on José Guilherme Merquior’s excellent book Foucault (London; 2nd edn. 1991), which I highly recommend as a critical overview of Foucault’s work.